We’ve been watching them lately, those gentlemen in finely wrought suits, whispered dispositions and gaunt expressions careening out of control. Once ubiquitous masters of the universe, chagrined expositors of fast cars, fast women and even faster risk appetites, we’ve been watching them lately on TV, sullen back room restaurants and idle train platforms considering their own mercurial rise and fall.
To quote Shakespeare’s Julius Caesar; “I have conquered entire kingdoms but have doth become half thy man in vices treason,” seems to go a long way in exploring the deterioration of another class of hero in America- the investment banker and his trading team, that for the longest time have been revered as untouchable, spinners of mass genius and unbridled wealth for the likes of you and them, but some would argue more them.
Like Julius Caesar and the last big fall in thy kingdoms reach back in 1929, society had seemed to reach the heights of its talent, demeanor and predisposition for lavish countenance, expense accounts and upwardly mobile dream stories come true. For a while, a long while, it all worked, save for a few hiccups here and there, ‘S and L’ crises to resolve, internet stocks to dislodge, foreign wars to lodge. We were all happy, could click and buy away, become the preferred disposition with our myriad credit cards, put idle dollars on vacant lots and watch them register orgasmic growth and the extended margin of further borrowings against further events, designer chandeliers and sumptuous holiday spots.
Nothing could go wrong, would go broke or even appear to even remotely resemble broke. Wall st and its denizens had made sure of this. They hired the brightest, the savviest and parceled abstract income streams into perpetuity and infinity, causal probability a bygone concept that one was sometimes aware of but too chagrined to assign a real value to. After all who could rightly believe that an earthquake would come and devour your newly erected princess city. Such things don’t make sense, aren’t suppose to make sense and to be frank are quite vulgar and untenable.
Yet here lies the paradox; that bad things aren’t suppose to happen to grand empires, the type that are supreme, arbiters of knowledge, aesthetics and mathematical formulas. We only read about them happening to unprepared ones, inhumane ones, third world look a likes. How can a master of the universe be undone by something beyond his perception?
If one observes society one will come away with the notion that the creation of capital and genius feeds the temporal desire of expanding consumer appetites and conversely these appetites in the shape of consumers, and other subsets with vast holdings of capital (i.e, municipal funds, pension funds, hedge funds) into mathematical ‘boom’ boxes trained to eviscerate greater generations of capital and rewards, all supposedly fully priced and accounted for. The magic circle is magic in that it gets bigger and everyone with some degree of credit worthy can play the game, it’s all terrific until the magic is no longer magic.
If one goes to the efforts of designing a black box, or a theorem model, say Black -Scholes used to derive value for probability streams or in other words the pay off for disaster insurance, or let’s say the Nash model for optimal behavior used to ferment or avoid near nuclear war (think Krushnev and JFK’s missile crises back in 1962) one has to go through the problem of assuming certain assumptions that are constant and rational, which most times, ask most casino houses and hedge funds will generate large stacks of returns. Except when they no longer are rational.
Like all black boxes, these black boxes hold the tenet that at some point no light can forever be absorbed, (think the big bang theory where only darkness and no matter exist and light is quickly extinguished) then it becomes apparent the arbiters of mathematical wisdom and consumer appetites had to create a perception of where one could no longer cease to be. A zone called catastrophe, delicately parceled and re parceled forever down the stream, but no matter how many times it was re-parceled the darkness always existed, if not close to hand but in our collective hand.
Yet like all paradoxes how can one assign risk probability when one is too busy pushing the rally button, printing more money, calling the world an ”irrational exuberant place” only to act even more irrationally themselves by lowering interest rates, bundling more risk play toys, printing more money and almost propagating the myth that in fact money does grow on trees, repealing laws/codes that are there for ones own safety and wondering some time down the road why some country villa in the back waters of Sweden suddenly went belly up, and behemoth world banks approaching precipitous belly flops.
With blood on their hands, this time more of their own than ours, these institutions which bought us mercurial rise, envy and the consummation of super human repose and appetite are trying to assuage the brood amongst capital enclaves, public display of fear and wildly diminished “S and P” prospects, and tax haven bail outs. There in front of our T.V.’s, those black boxes we watch the whole world implode, rally, implode once more and then give you a high five once Santa Claus makes his guest appearance. (Santa this year is courtesy of the treasury and your tax receipts…thank goodness for wish lists).
They had accepted treason, vice and gluttony as anything but, and how could they not, everyone was forever cheering them along, from the press who now brandish opined dictum, to the scurrilous investor pleading for that housing loan, and the yen carry forward trader hustling for a quarter point higher return.
It’s like blaming our ‘Hollywood” star for having the tenacity to actually break a leg, and by all means why are we all acting so surprised that the fat lady has finally gone and done such a thing.
Surely history is a code and a signifier of pattern and human conduct. Yes we all agree they pushed the lever, but we also helped them, turned up to the pep rallies, voted the parties that ratified whatever needed to be ratified, (think mass deregulation starting with the democrat president Bill Clinton and continuing with dizzying speed with George W of the Republican team), and even got merrily drunk at all those parties we attended.
Of course you’ll be reading it for a while now, privatized profits and socialized losses, or heads I win, and tails unfortunately for you I still win. It’s a fixed game you’ll say. But it’s not. We fixed the game all together. Nothing happens unless we read the fine lines on the wall or by choosing to participate or by passively choosing not to participate. Let the system go down you think and forever risk ever getting that student or car loan. Perhaps now is the time to learn some lessons, and impress upon ourselves the need to take certain matters in our hands, to think for ourselves, not to accept every sales pitch that comes our way and to look deeply into the black hole that resides very deeply in every single one of us.
One will forever be compelled by ingenuity, appetite and individual fortitude and ambition- it is after all the American way, or perhaps the human way.
But if one is to observe the cycle of nature one must realize that what goes up must at some point come down, it might not come down as far it went up, but the law of nature does believe in mean reversion, the idea that in the long run save for fierce tidal waves, nuclear war and complete banking annihilations the world does return to some common mean denominator of being, sensibility, and if it doesn’t it’s only because we perceive it otherwise.
So the stories will continue to run and the grim faces will sulk, but as Julius Caesar finally realized as his enemies dagger lay in his soul; “t’was my own dagger from my own hand that led to such folly.”